This month, we discuss United States v. Vilar,1 in which the U.S. Court of Appeals for the Second Circuit considered whether criminal liability under Section 10(b) of the Securities Exchange Act of 1934 applies to the purchase and sale of securities outside of the United States.2 The court’s opinion, written by Judge José A. Cabranes and joined by Judge Jon O. Newman and Judge Chester J. Straub, addressed an issue left unsettled following the Supreme Court’s 2010 decision in Morrison v. National Australia Bank,3 which held that civil liability under Section 10(b) does not apply to an extraterritorial purchase or sale of securities. Morrison, however, did not address the applicability of Section 10(b) criminal liability to extraterritorial conduct. Affirming the district court’s opinion, the court held that Section 10(b) and its implementing regulation, Rule 10b-5, do not apply to extraterritorial conduct, regardless of whether the liability is criminal or civil.4
Background
This case arises from a criminal conviction of Alberto Vilar and Gary Alan Tanaka in the U.S. District Court for the Southern District of New York. Vilar and Tanaka were prominent investment managers and advisers, who at the peak of their careers were responsible for managing more than $9 billion in investments for their clients. Vilar and Tanaka principally managed their clients’ investments through three main entities: (1) Amerindo Investment Advisors Inc. (Amerindo U.S.), an investment adviser registered with the Securities and Exchange Commission; (2) Amerindo Investment Advisors Inc. (Amerindo Panama), a Panamanian corporation that managed investments offered to U.S. investors; and (3) Amerindo Investment Advisors (UK) Ltd. (Amerindo U.K.), a United Kingdom corporation that managed a portfolio of U.S. emerging growth stocks for U.K. investors.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
